It just occurred to me that I haven’t made much money at ALL on any of my savings or money market accounts I have… Or even checking accts for that matter, though that one is *always* in the $hitter. In fact, I haven’t really blogged about the Fed or its affects on the interest rates since June of ’08! When we were deciding on whether or not to lock in a fixed rate for our mortgage (thank goodness we didn’t!), and the economy was in full melt down mode… jeesh…
But here we are, 3 and 1/2 years later, and our rates are still frozen at the incredibly low amounts in hopes our economy will once again start looking picking up steam. And with the Fed announcing the other week that they’re KEEPING it that way for ANOTHER couple years or so (at least ’till the end of 2014), it looks like we won’t be getting back to the hay days of interest-making for quite some time.
But not all is bad, either. In fact, selfishly speaking I actually PREFER to have these stay super low like that for a few more years! Because if the interest rates on our savings/checking accounts are super low, it means our DEBT interest rates remain lower too! At least in the general scheme of things. And right now, that means two things for me, personally:
- Our 2nd mortgage (a maxed out HELOC) remains at only 2.8%!!! My 2nd one! That’s almost 3 percentage points lower than my 1st mortgage which is not supposed to happen! :) So obviously I’m gonna be a fan of lower rates just purely based on me saving money on interest debt here for the next few years until I pay that bad boy off (25 months to go! Jeesh…).
- The second reason I like this a lot is that my credit card rates are insanely low too, stuck at a crazy 6%. Which is pretty good if I ever wanted to leave any debt on there for an extended amount of time. I won’t be, of course, since I always pay off our credit cards in full each month, but it’s nice to know I won’t be slammed if I make any stupid mistakes down the road or anything ;)
So pros and cons to lower interest rates for sure. (And I’d be singing a different tune too if I had absolutely NO debt and hundreds of thousands stashed away in cds or savings accounts). The scariest part here, though, with all this stuff, is the fact that the Fed STILL doesn’t trust our economy enough to start pumping up the rates at all! If they’ve just renewed their stance for another 2+ years of non-raising, it means they know a LOT more about what’s going on with our futures than they probably let on (and rightfully so – you don’t want mad mayhem going around if they say the world is falling a part!). Who knows for sure how drastic, or not, the future economies we live in are deteriorating or anything, but right now it doesn’t look pretty. Going on only the interest rates, of course ;)
But getting back to our *specific* situations today – how does this non-rate change affect YOU at this moment? Has it been a GOOD thing for y’all these past few years, or is it really more annoying – personally speaking – since you can’t EARN much money on usual assets like you used to? There’s always pros and cons to all of these kinda things, but I’m hoping you’re taking as much advantage as you can so it all goes MORE into your favor as time goes on here:) It’s a damn good time to be financing/re-financing stuff, that’s for sure!
(Photo by Clearly Ambiguous)
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!